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EXHIBIT 10.17
XxxxxxxXxx.xxx, Inc. EMPLOYMENT AGREEMENT FOR March 20, 2000
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AGREEMENT dated as of March 31, 2000, between XxxxxxxXxx.xxx, Inc. (the
"Company"), a Utah corporation, having its principal place of business located
at 0000 X. Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000 and Xxxxxx
Xxxxxxx Xxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive has expertise and experience as a Vice President
of Marketing for IBM;
WHEREAS, the parties acknowledge that the Executive's abilities and
services are unique and essential to the prospects of the Company; and
WHEREAS, in light of the foregoing, the Company desires to employ the
Executive as its Chief Financial Officer, and the Executive desires to accept
such employment.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby
accepts employment upon the terms and conditions hereinafter set forth.
2. Term. This Agreement shall commence on the date hereof and shall terminate as
of the earlier of:
(a) two years from the date hereof;
(b) the death of the Executive;
(c) thirty days after notice is given by the Company to the Executive
after a material breach hereof; or
(d) thirty days after notice is given by the Executive to the Company
after a material breach hereof by the Company.
The exercise of the Company's or the Executive's right to terminate this
Agreement pursuant to clause (c) or (d) hereof, as th case may be, shall not
abrogate the rights and remedies of the terminating party in respect of the
breach giving rise to such termination.
3. Compensation. For all services rendered under this Agreement:
(a) The Company shall pay the Executive a base salary of $125,000 per
annum in equal semi-monthly installments. Following the IPO the Executive's
salary will be increased to be commensurate with that of a Vice President of
Sales/Marketing of a successful dot-com company
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under comparable circumstances. If the IPO has not occurred by July 15, 2000,
the Executive's salary will be increased to $160,000 at that time. In addition,
the Company shall grant Initial Stock Options in the amount of 30,000 shares
vesting in equal increments semi-annually over a five (5) year period beginning
at the IPO except that five percent (5%) of the total will vest at the time of
the IPO. Also, in addition, the Company shall also pay the Executive a signing
bonus of ten thousand dollars $10,000).
(b) The Company intends to issue additional ISO's from time to time in
appropriate response to the financial performance of the company. The degree of
the Executive's participation in such ISO's will depend on the performance of
the Executive as determined at the sole discretion of the Company.
(c) At the end of each year, Employee shall be paid a bonus of one (1)
percent to 10 percent of his annual salary determined at the sole discretion of
the Company.
(d) At the end of each year, Employee shall be paid profit-sharing from
one (1) percent to 40 percent, for the impact of Employee's efforts on profit as
determined at the sole discretion of the Company.
(e) If the Executive has been disabled for a period of at least four
months, during which period he was disabled for 90 consecutive days, the Company
may elect, upon notice to the Executive, to pay the Executive one-third of the
compensation the Executive would otherwise be entitled to pursuant to clause (a)
above and shall thereupon have no further obligation under Section 3(b), (c) or
(d) hereof. Disability shall mean the Executive's inability, due to sickness or
injury, to perform effectively his duties hereunder.
(f) If this Agreement is terminated or the Company notifies the
Executive in respect of his disability pursuant to Section 3(d) hereof,
incentive compensation in respect of the year of such termination or notice is
given shall be computed as if such termination had not occurred and the
Executive shall be paid an amount equal to the product of the incentive
compensation to which he would otherwise be entitled, multiplied by a fraction
having a numerator equal to the number of days in such year preceding the date
of termination and a denominator equal to 365; provided that the Executive shall
not be entitled to any amounts pursuant to this Section 3(b) and 3(c) if this
Agreement is terminated pursuant to Section 2(c) prior to the date of payment of
such amount.
(g) During the term of his employment, the Executive shall be entitled
to participate in employee benefit plans or programs of the Company, if any, to
the extent that his position, tenure, salary, age, health and other
qualifications make him eligible to participate, subject to the rules and
regulations applicable thereto. Additionally, the Executive shall obtain any
benefits or will be included in any compensation plans or programs offered to
more than one other executive of the Company.
4. Duties. So long as the Company has not notified the Executive of his
disability pursuant to Section 3(d), the Executive is engaged as Chief Financial
Officer of the Company and, subject to the direction of the Board of Directors
and the Company" officers designated by the Board of
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Directors, shall perform and discharge well and faithfully the duties which may
be assigned to him from time to time by the Company in connection with the
conduct of its business. If the Executive is elected or appointed a director or
officer of the Company or any subsidiary thereof during the term of this
Agreement, the Executive will serve in such capacity without further
compensation.
5. Extent of Service. So long as the Company has not notified the Executive of
his disability pursuant to Section 3(d) hereof, the Executive shall devote his
entire time, attention and energies to the business of the Company and shall not
during the term of this Agreement be engaged (whether or not during normal
business hours) in any other business or professional activity, whether or not
such activity is pursued for gain, profit or other pecuniary advantage; but this
shall not be construed as preventing the Executive from (a) investing his
personal assets in businesses which do not compete with the Company in such form
or manner as will not require any services on the part of the Executive in the
operation or the affairs of the companies in which such investments are made and
in which his participation is solely that of an investor, (b) purchasing
securities in any corporation whose securities are regularly traded provided
that such purchase shall not result in his collectively owning beneficially at
any time five percent or more of the equity securities of any corporation
engaged in a business competitive to that of the Company, and (c) participating
in conferences, preparing or publishing papers or books or teaching so long as
the Board of Directors approves of such activities prior to the Executive's
engaging in them. Prior to commencing any activity described in clause (c)
above, the Executive shall inform the Board of Directors of the Company in
writing of any such activity.
6. Disclosure of Information.
(a) The Executive represents and warrants to the Company that Exhibit A
hereto sets forth (i) all rights, in respect of the Executive's engaging in any
business activity (whether or not for profit), of former employers, clients,
principals, partners or others with whom or for whom the Executive has performed
services since March 20, 2000, and (ii) all of the business activities (whether
or not for profit) of the Executive applicable to periods after the time such
services were performed.
(b) The Executive recognizes and acknowledges that the Company's trade
secrets and proprietary information and processes, as they may exist from time
to time, are valuable, special and unique assets of the Company's business,
access to and knowledge of which are essential to the performance of the
Executive's duties hereunder. The Executive will not, during or after the term
of his employment by the Company, in whole or in part, disclose such secrets,
information or processes to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, nor shall the Executive make use of
any such property for his own purposes or for the benefit of any person, firm,
corporation or other entity (except the Company) under any circumstances during
or after the term of his employment, provided that after the term of his
employment these restrictions shall not apply to such secrets, information and
processes which are then in the public domain (provided that the Executive was
not responsible, directly or indirectly, for such secrets, information or
processes entering the public domain without the Company's consent). The
Executive agrees to hold as the Company's property, all memoranda, books,
papers, letters, formulas and other data, and all copies thereof and therefrom,
in any way relating
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to the Company's business and affairs, whether made by him or otherwise coming
into his possession, and on termination of his employment, or on demand of the
Company, at any time, to deliver the same to the Company.
7. Inventions. The Executive hereby sells, transfers and assigns to the Company
or to any person, or entity designated by the Company, all of the entire right,
title and interest of the Executive in and to all inventions, ideas, disclosures
and improvements, whether patented or unpatented, and copyrightable material,
made or conceived by the Executive, solely or jointly, or in whole or in part,
during or before the term hereof (but after January 2, 2000) which (i) relate to
methods, apparatus, designs, products, processes or devices sold, leased, used
or under construction or development by the Company or any subsidiary or (ii)
otherwise related to or pertain to the business, functions or operations of the
Company or any subsidiary [or (iii) arise (wholly or partly) from the efforts of
the Executive during the term hereof.] The Executive shall communicate promptly
and disclose to the Company, in such form as the Company requests, all
information, details and data pertaining to the aforementioned inventions,
ideas, disclosures and improvements; and, whether during the term hereof or
thereafter, the Executive shall execute and deliver to the Company such formal
transfers and assignments and such other papers and documents as may be required
of the Executive to permit the Company or any person or entity designated by the
Company to file and prosecute the patent applications and, as to copyrightable
material, to obtain copyright thereon. Any invention by the Executive within one
year following the termination of this Agreement shall be deemed to fall within
the provisions of this paragraph unless proved by the Executive to have been
first conceived and made following such termination.
8. Covenant Not to Compete.
(a) During the term hereof and, unless this Agreement is terminated
pursuant to Section 2(d) hereof, for a period of one year thereafter, the
Executive shall not compete, directly or indirectly, with the Company, interfere
with, disrupt or attempt to disrupt the relationship, contractual or otherwise,
between the Company and any customer, client, supplier, consultant or employee
of the Company, including, without limitation, employing or being an investor
(representing more than a 5% equity interest in) or officer, director or
consultant to, any person or entity which employs any former key or technical
employee whose employment with the Company was terminated after the date which
is one year prior to the date of termination of the Executive's employment
therewith. An activity competitive with an activity engaged in by the Company
shall mean performing services (whether as an employee, officer, consultant,
director, partner or sole proprietor) for any person or entity engaged in the
business then engaged in by the Company, which services involve functions of any
nature performed by the Executive at any time under this Employment Agreement.
(b) It is the desire and intent of the parties that the provisions of
this Section 8 shall e enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular portion of this Section 8 shall be adjudicated to
be invalid or unenforceable, this Section 8 shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of this Section in the
particular jurisdiction in which such adjudication is made.
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(c) Nothing in this Section 8 shall reduce or abrogate the Executive's
obligations during the term of this Agreement under Sections 4 and 5 hereof.
9. Remedies. If there is a breach or threatened breach of the provisions of
Section 5, 6(b), 7 or 8 of this Agreement, the Company shall be entitled to an
injunction restraining the Executive from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
10. Insurance.. The Company may, at its election and for its benefit, insure the
Executive against accidental loss or death and the Executive shall submit to
such physical examination and supply such information as may be required in
connection therewith.
11. Relocation; Location of Performances.
(a) The parties agree that the Executive is not required to change his
place of residence to perform hereunder.
(b) The Executive's services will be performed in the Ogden/Salt Lake
City/Provo area. The Executive's performance hereunder shall be within such area
or its environs. The parties acknowledge, however, that the Executive may be
required to travel extensively in connection with the performance of his duties
hereunder. The following is a clarification of the intent of this Section 11(b).
The Executive agrees to work in substantial compliance with the following
Company work schedule at the locations set forth:
(i) Five days in Salt Lake City during 1 week out of every 4
weeks from September through June.
(ii) Four days in Salt Lake City and one day on the east
coast during 1 week out of every 4 weeks from September
through June.
(iii) In July and August, the Executive may work on the east
coast on either Monday or Friday and spend only 4 days
in Salt Lake City for the 2 weeks during the months of
July and August.
(iv) The Executive will travel on Company business during a
3rd week of the 4 weeks throughout the year.
(v) The Executive will work in New York during a 4th week of
the 4 weeks.
(vi) There will be regular visits to key customers.
(vii) The Company intends to establish a national sales force
to support the sales/marketing efforts.
12. Assignment. This Agreement may not be assigned by any party hereto provided
that the Company may assign this Agreement:
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(a) to an affiliate so long as such affiliate assumes the Company's
obligations hereunder, provided that no such assignment shall discharge the
Company of its obligations herein, or
(b) in connection with a merger or consolidation involving the Company
or a sale of substantially all its assets to the surviving corporation or
purchase as the case may be, so long as such assignee assumes the Company's
obligations thereunder.
13. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and sent by registered mail to the Executive
at his residence at 0000 Xxxx Xxxx Xxx., Xxxxxxxx, Xxxx 00000 or to the Company
at its address set forth above, Attention: Xxxx Xxxxxxxxx.
14. Waiver of Breach. A waiver by the Company or the Executive of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
15. Entire Agreement. This instrument contains the entire agreement of the
parties. It may be changed only by an agreement in writing signed by a party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
16. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the State of Utah without regard to its choice of
law principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first hereinabove written.
XxxxxxxXxx.xxx, Inc.
by:
/s/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
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